BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1411
                                                                  Page  1

          Date of Hearing:   May 8, 2013

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

            AB 1411 (Committee on Revenue and Taxation) - As Introduced:   
                                   March 19, 2013 

          Policy Committee:                              Revenue and  
          Taxation     Vote:                            6-2

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill authorizes the Franchise Tax Board (FTB) to use  
          taxpayers' updated address information obtained through the  
          Financial Institution Record Match (FIRM) for tax administration  
          purposes.

           FISCAL EFFECT  

          The FTB staff estimates this bill will result in an annual  
          revenue gain of $150,000 in fiscal year (FY) 2012-13, $200,000  
          in FY 2013-14, and $150,000 in FY 2014-15.

           COMMENTS  

           1)Purpose  .  The FTB is sponsoring this measure, which allows the  
            FTB to use tax debtor address information obtained through the  
            FIRM system for purposes other than tax collection.  FTB  
            states the use of the information obtained from FIRM would  
            improve fair and efficient tax administration by allowing the  
            use of the most current address available to contact  
            taxpayers. 
             
             Through the use of automated data exchanges, the FIRM system  
            allows the FTB to match its list of delinquent tax debtors  
            against the names of financial institution accountholders.   
            This information exchange is used solely for tax collection,  
            and existing law prohibits the use of FIRM-obtained  
            information for any other purpose.  According to FTB, this  
            prohibition against using the date other purposes than tax  
            collection, occasionally prevents FTB from using updated  








                                                                  AB 1411
                                                                  Page  2

            address information obtained through the FIRM system for other  
            purposes.  This can result in taxpayers not receiving notices,  
            refunds, or other important correspondence from the FTB.  

           2)Background  .  Under existing law, the FTB is required, in  
            coordination with financial institutions doing business in  
            this state, to operate the FIRM system, which provides a means  
            to match delinquent tax debtor records with customer records  
            provided by financial institutions.  The FIRM system permits  
            the FTB to identify previously unknown non-interest-bearing  
            deposit accounts held by delinquent income tax debtors and  
            collect outstanding income tax debts.  

           3)Previous Legislation  .

             a)   SB 1015 (Senate Committee on Budget and Fiscal Review),  
               Chapter 37, Statutes of 2012, requires EDD and BOE to  
               participate in the FTB's FIRM program.

             b)   SB 86 (Senate Committee on Budget And Fiscal Review),  
               Chapter 14, Statutes of 2011, requires the FTB, in  
               coordination with financial institutions doing business in  
               this state, to establish FIRM using automated data  
               exchanges to the maximum extent feasible. 


           Analysis Prepared by :    Roger Dunstan / APPR. / (916) 319-2081